HOLE 19GOLF RETAIL & SIMULATION

COURTNEY SANDIFORDCHRIS HOFFOS

Table of ContentsTable of Contents..................................................................................................................................................................2

1.0 Executive Summary...................................................................................................................................................4

2.0 Introduction....................................................................................................................................................................5

2.1 Strategy and Goals......................................................................................................................................................5

2.2 Mission Statement......................................................................................................................................................5

3.0 Operations Plan...............................................................................................................................................................5

3.1 Location.......................................................................................................................................................................5

3.2 Floor Plan & Layout.....................................................................................................................................................6

3.3 Business Hours of Operation.......................................................................................................................................6

3.4 Suppliers......................................................................................................................................................................6

3.5 Capital Budget.............................................................................................................................................................6

3.6 Inventory Management...............................................................................................................................................7

3.7 Operating Expenses.....................................................................................................................................................7

3.7 Cost of Sales................................................................................................................................................................8

4.0 Human Resources Plan....................................................................................................................................................8

4.1 Organizational Chart....................................................................................................................................................8

4.2 Weekly Schedule.........................................................................................................................................................9

4.3 Job Descriptions..........................................................................................................................................................9

4.4 Shareholders Agreement...........................................................................................................................................10

4.5 Human Resources Strategy.......................................................................................................................................10

4.6 Human Resources Costs............................................................................................................................................10

5.0 Marketing Plan..............................................................................................................................................................11

5.1 Target Market............................................................................................................................................................11

5.2 Products/Simulators..................................................................................................................................................11

5.3 Price Strategy............................................................................................................................................................11

5.4 Distribution Strategy.................................................................................................................................................13

5.5 Promotional Activities...............................................................................................................................................13

5.6 Competitors...............................................................................................................................................................13

5.7 Purchasing Patterns of Consumers............................................................................................................................14

5.8 Marketing Expenses..................................................................................................................................................14

6.0 Financial Plan.................................................................................................................................................................15

6.1 Capital Requirements................................................................................................................................................15

6.2 Projected Income Statement.....................................................................................................................................16

6.3 Projected Balance Sheet............................................................................................................................................17

6.4 Critical Variables and Sensitivity Analysis..................................................................................................................18

6.5 Break Even Analysis...................................................................................................................................................18

6.6 Net Present Value and Internal Rate of Return.........................................................................................................19

6.8 Risk Analysis..............................................................................................................................................................19

7.0 Summary/Feasibility......................................................................................................................................................19

1.0 Executive SummaryHole 19 Golf Retail and Simulation is a business located in Weyburn, SK. Co-founders include Courtney Sandiford and Chris Hoffos, who have both grown up in South-East Saskatchewan. With the founders having experience in the golf industry, as well as retail and sales management, we believe we can offer a store unlike any other currently available. We carry the biggest brands in golf today including:

Titleist Ping Taylormade NikeGolf Calloway

Along with golf equipment and accessories, we offer a brand new social experience in the way of simulated golf. Within our location there are two TruGolf high-definition simulators, with 82 available courses to play and a variety of settings to make it the perfect round for any level of golfer.

When it comes to working at Hole 19, we are not looking for just any set of employees. We want our staff to not only have knowledge of golf, but for them to bring value to our business with their approachable personalities and savvy sale skills. Our marketing approach is quite traditional at Hole 19. Using Facebook, Instagram, Twitter etc., we can keep our customers in the loop with any sales; discount offers and just general happenings within the store. We will be advertising on the following radio stations in Weyburn, whose signal reaches the smaller communities that also have golf courses:

Magic 103.5 AM 1190 K106

Along with these traditional marketing techniques, we hope to use Graham Delaet as a celebrity endorsement, considering he was born and raised in Weyburn, Saskatchewan and is currently playing on the World Tour.

Our financials conclude an internal rate of return of 31.4%. This makes us believe starting this business and investing our time and money will be worthwhile, and lead to a recognized and active member of the Weyburn and South-east Saskatchewan business community.

2.0 Introduction

2.1 Strategy and Goals

Hole 19 seeks to be very successful in within the first five years of being in business with goals that include meeting customer expectation and needs, play a contributing role in the community by being involved in local events, gain high community awareness and become a place where people want to come and enjoy their favourite game.

2.2 Mission Statement

Hole 19’s missions statement reads, “Hole 19 strives to provide golfers with quality golf clothing and equipment in order to keep up with industry trends as well as provide a unique social environment through the golf simulation experience.

3.0 Operations Plan

3.1 Location

Hole 19 is located in Weyburn, Saskatchewan on 1st Avenue in the newer area of the city that is currently developing rapidly. This is a great area to be in because it is where new businesses are being built as Weyburn is currently expanding in that direction. The consumers that live in the area have higher incomes and are constantly building new houses on this side of the city. Below is a snapshot of the location of Hole 19 as well as a picture of the empty lot it will be built in.

Figure 1: Location of Hole 19

3.2 Floor Plan & Layout

Figure 2: Floor Plan and Layout of Hole 19

To the left is the floor plan to scale for Hole 19. When the customer walks in the store the first thing they see is women’s clothing with shelves where shirts and sweaters will be hung and tables and racks where pants and shorts will be. If they turn to the right, it is where the golf shoes will be displayed with the men’s on the left and women’s on the right. If they continue into the store the men’s clothing is on the other side of the women’s with a similar set up. If they are looking for clubs and equipment it will be in the back right of the store with shelving along the wall where the clubs will be and shelving in rows where the equipment will be. If they want to test out the putters there is a putter testing area to the direct right of the clubs. Once they have decided what they want to buy, they make their way to the

checkout counter along the left side wall where impulse buy items such as tees and balls will be. Hats are available behind the counter and can be requested if they want to purchase one. If a customer comes in and wants to use the simulators, they will come straight to the front counter and check in, making sure they have the right time, purchase any drinks or food they desire and then head into the simulator rooms in the back left of the store. Customers can pre-book times either on the phone or on the website to secure a tee time. It takes an average of one hour per person to do 18 holes with a maximum of four people per session. This breaks the sessions into 3 time slots that can be booked during the day; 9:00am to 1:00pm, 1:00pm to 5:00pm and 5:00pm to 9:00pm for weekdays and 8:00am to 12:00pm, 12:00pm to 4:00pm and 4:00pm to 8:00pm.

3.3 Business Hours of Operation

The hours of operation for Hole 19 are Monday to Friday from 9:00am to 9:00pm and weekends from 8:00am to 8:00pm.

3.4 Suppliers

Our suppliers for stocking Hole 19 with golf equipment, supplies and accessories will come from the brand sites such as Taylormade.com and Ping.com, meanwhile we will be using Triangle Surplus and Golf Clearance Warehouse who purchase surplus golf equipment from the major manufacturers. The simulators will be bought and installed directly from the people at Trugolf.com

3.5 Capital Budget

Hole 19’s Capital Budget is $1,527,144 as seen below in the breakdown of capital costs. The majority of costs will be coming from the construction building a new facility in the lot that we purchased.

Description Cost Source

Land 150,000 City of Weyburn

Building 1,000,000 Terra Developments Inc.

Land Development 100,000

Equipment 20,000 Adcogroup World

Initial Inventory 207,144 Suppliers

Simulators (2) 50,000 Trugolf

Total Capital Required 1,527,144Figure 3: Capital Budget

3.6 Operating Expenses

Hole 19’s operating costs are expressed in Figure 4 below. A detailed breakdown of the marketing and human resources expenses can be found later on in the report in the corresponding sections.

2015 2016 2017 2018 2019

Accounting and Legal 2,000 2,050 2,101 2,154 2,208

Advertising (Marketing) 25,927 26,575 27,240 27,921 28,619

Other Expenses (POS, Security) 4,000 4,100 4,203 4,308 4,415

Insurance 1,500 1,538 1,576 1,615 1,656

Property Taxes 5,000 5,125 5,253 5,384 5,519

Telephone 1,200 1,230 1,261 1,292 1,325

Utilities 12,000 12,300 12,608 12,923 13,246

Repair and Maintenance 2,000 2,050 2,101 2,154 2,208

Wages 249,583 283,723 314,104 333,959 355,548

Employee Benefits 13.96% 34,842 39,608 43,849 46,621 49,635

Misc. Variable Costs % Sales

0.5% 5,836 7,477 8,814 9,486 10,209

Capital Cost Allowance 37,000 69,800 62,112 55,711 50,349

Debt Interest 52,500 50,411 48,175 45,783 43,224

Total operating Expenses

433,387 505,986 533,396 549,310 568,159

Figure 4: Operating Expenses

3.7 Cost of Sales

The profit margins of Hole 19 consist of 30% on equipment and 50% on clothing. Further detail is assessed in the financials section later on in the report.

4.0 Human Resources Plan

4.1 Organizational Chart

Figure 5: Organizational Chart

4.2 Weekly Schedule

The figure below describes the weekly schedule for the managers, full time staff and part time staff members.

MON TUES WED THURS FRI SAT SUN Total Hours:

Manager (x2) 9-51-9

9-51-9

9-51-9

9-51-9

9-51-9

12-33-6

12-33-6

68

Supervisor 1-9 1-9 1-9 1-9 1-9 40

Full Time 1 9-5 9-5 9-5 8-4 8-4 37

Full Time 2 1-9 1-9 1-9 1-8 1-8 38

Full Time 3 1-9 1-9 9-5 9-5 9-5 37

Part Time 5-9 5-9 5-9 8-12 8-12 20Figure 6:Weekly Schedule for Hole 19

4.3 Job Descriptions

Description: Supervisor

Job Duties

Demonstrate managerial/supervisorial skill, along with a solid knowledge base when it comes to golf and golf-related products. Taking inventory, making purchase orders, scheduling staff, setting up displays and process payments by totaling purchases, processing cash and credit card payments. Assigning and monitoring of clerical functions and training of new employees, as well as disciplining and monitoring employee’s job results.

Skills/Qualifications

Delegation, Staffing, Developing Standards, Inventory control, Supervision, Selling to customer’s needs, Motivation for sales and Internal communications.

Description-Full Time Sales Associate

Job Duties

Create and maintain relationships with customers and offer guidance and recommendation when it comes to finding the right product for the consumer. Provide information on products and document sales by creating customer profiles. Process payments by totaling purchases, processing cash and credit card payments. Keep clientele informed of upcoming sales, promotions or events within the store.

Skills/Qualifications

Customer service, Product knowledge, General math skills, Dependability, People skills and Internal communications.

Description-Part time Sales Associate

Job Duties

Assist in general upkeep, appearance and cleanness within the store. Provide information on products and document sales by creating customer profiles. Process payments by totaling purchases, processing cash and credit card payments. Keep clientele informed of upcoming sales, promotions or events within the store.

Skills Qualifications

Customer service, Product knowledge, General math skills, Dependability, People skills and Internal communications.

4.4 Shareholders Agreement

Courtney Sandiford and Chris Hoffos will hold 50% each of the total shares for the corporation and each hold the necessary requirements to make strategic decisions for the company.

4.5 Human Resources Strategy

At Hole 19 we would prefer our employees to not only work at the establishment, but also bring value to the store and the experience. The hiring process will include looking for individuals with golf backgrounds, knowledge and love of the game is what we are looking for, skill is not our priority. Sales experience will also be advantageous for potential employees. The chain of command will be full-time and part-time staff report to the supervisor (our most senior employee after a few months of operation) and that supervisor reports to one of the two managers (Courtney and Chris). The full-time and part-time employees are not discouraged to communicate with the managers, but we’d prefer to delegate smaller matters directly to the supervisor such as scheduling and training practices.

4.6 Human Resources Costs

Hole 19 consists of two managers who work full-time hours, along with four full-time staff, with a varying amount of part time staff over the 5 years, displayed in figure 6 below. Managers will receive a salary of $48,960, going up the by inflation factor of 1.025 over the 5 years. Full-time staff will receive a rate of $18/hour, again going up by the inflation factor over the years. Meanwhile the part-time staff will be paid a competitive $11/hour, going up by the inflation factor each year. Turning the total manager, full-time and part-time wage costs into percentages we see that 40% of it goes to the managers, 56% of it the full-time staff and approximately 4% to the part time staff.

2015 2016 2017 2018 2019

Manager Salary 48,960 50,184 51,439 52,725 54,043

Full time staff (wage rate/hr) $ 18.00 $ 18.45 $ 18.91 $ 19.38 $ 19.87

Part time staff (wage rate/hr) $ 11.00 $ 11.28 $ 11.56 $ 11.85 $ 12.14

Salary and Wage Costs

Manager 97,920 100,368 102,877 105,449 108,085

Full time staff 141,120 144,648 148,264 151,971 155,770

Part time staff 10,543 38,707 62,963 76,539 91,693

Total Salaries and Wages 249,583 283,723 314,104 333,959 355,548Figure 7: Human Resources Costs

5.0 Marketing Plan

5.1 Target Market

At Hole 19, we want to be the place where people feel comfortable and go to when they have golf-related questions or needs, as well as looking for a social activity they may not have tried before such as simulated golf. Our target market would begin with avid golfers, those who golf regularly and purchase golf equipment and accessories fairly often as well The avid golfer always follows to new trends and wants to try the new products, so they should be good some repeat business. Next we have those who do not golf at all, our something like once a year at the company tournament, family reunion etc.

We want these people to come in and feel free to use the simulators on an easier setting and just have a good time playing golf and spending time with their friends, family or significant others. Next in our target market, we would like the retired community, those who are free during the days to use the simulators and possibly have regular golf rounds on a certain day of the week, every week. A social experience similar to going to the coffee shop every morning but a lot more fun. Last but certainly not least in our target market we have women. Just like you see on a regular golf course, there are always a few groups of ladies who play together regularly, and just like the retired folks we would like to book them into the simulators consistently.

5.2 Products/Simulators

The inclusion of simulators within our golf retail store gives our customers not only the obvious chance to try out products they are interested in, but also a chance to experience a unique social experience with friends and family. Perfect for date nights, staff parties, and family outings or just keeping your game in check over the winter, the Trugolf high-definition simulators will exceed the expectations of any level of golfer. With over 8o courses to choose from including incredible fantasy or artificial courses to the top PGA Tour courses such as Pebble Beach and St. Andrews, finding a new setting could not be easier. The ball-tracking and swing trace technology can drastically increase the amount of time it takes to fix imperfections in your game, and if you’re playing just for fun the Trugolf Simulator is a great new way to experience the competitive, exhilarating and challenging game of golf.

5.3 Price Strategy

Products:

Hole 19’s pricing strategy consists of competitive pricing on all products and slightly higher pricing for the simulator rounds in order to cover to the cost of them more efficiently. The average prices for products can be seen below.

Product Item Average Price

Jackets $175

Shirts $50

Shorts $75

Pants $100

Hats $28

Product Item Average Price

Drivers $277

Woods $183

Irons (Set) $713

Wedges $130

Putters $123

Product Item Average Price

Bags $150

Tees $10

Balls $40Figure 8: Average Prices for Products

Simulators:

Hole 19 will be purchasing 2 of the 2014 models of Trugolf’s simulators. They are $25,000 each for a total of $50,000, installations included. Our customers will pay approximately $28.50/each to use the simulator and group rates (consisting of 4 people) will be available for $85/group on weekdays and $100/group on weekends. Within each simulator room, a see-through glass enclosure, seating will be available as well as food and drink. The drinks available are beers, coolers and spirits and the food will consist of dry snacks and pre made sandwiches, made at the beginning each of day.

5.4 Distribution Strategy

All of Hole 19’s sales will be done in the retail store located in Weyburn, Saskatchewan

5.5 Promotional Activities

Hole 19’s promotions will be a variety of communications tools. Radio ads, social media, a very user-friendly website, flashy billboards possible celebrity endorsement should be enough to get word out in a smaller city that a new place has opened. The radio stations are Magic 103.5, AM 1190 radio and K106. Using Instagram we would like to portray the interesting social experience we offer through the simulated rounds of golf, as well as post pictures of our latest clubs and equipment. Our Facebook and Twitter pages will let customers be able to communicate with us, as well as allowing us to have a platform for getting word out about sales or promotions. The website itself will allow users to browse our selection, compare prices and view our hours of operation. Booking sessions for simulator use will also be available online through the website. Protouch Signs is responsible for our billboard, the image being split between an individual using the simulator as their friends watch and the other image being the layout of the store, allowing people to view the wide selection of products and equipment we offer. We would also like to include a celebrity endorsements from Graham Delaet. He was born and raised in Weyburn and is heavily praised throughout the community and currently is in the World Golf Tour. We would like to bring him into the store for a day in order to sign autographs and participate in a contest to see if someone can beat him on the simulators for a free round of golf.

5.6 Competitors

Our competitors in Weyburn are very minimal, with Canadian Tire and Wal-Mart having golf equipment available, but at a lower price and much lower quality. In Regina, approximately an hour away from our location, Golf-Town and Nevada Bob’s offer the same products at a slightly lower price, we assume consumers will either not notice the slightly higher price, or consider it a trade-off for not having to drive to satisfy their golf needs. Also in Regina is an organization called First Tee, which offers the simulated golf play on 10 available simulators. Their simulators are slightly outdated so Hole 19 offers a higher quality, but also at a slightly higher price than that of First Tee. Seen below is a matrix of the competitors based on price and quality to indicate where Hole 19 fits in against them.

Figure 9: Competitors Matrix

5.7 Purchasing Patterns of Consumers

The trend for higher sales in the golf industry, particularly in equipment and accessories tends to be in the beginning of spring and quite consistent through the summer months. December also sees higher sales with people purchasing for the holidays and Christmas. As for the simulators, what we have witnessed from our competitors is that typically indoor golf is used much often during the winter months. Hole 19 looks forward to consistent and steady business all year

round. When it comes to finding our average purchase price, it is a difficult number to agree on because we have high cost items such as a complete set of golf clubs (driver, irons, wedges and putter) as well as low cost items such as $3 for a bag of wooden tees.

5.8 Marketing Expenses

As seen below, the expenses we plan to incur with our marketing plan total up to just under $26,000. The breakdown consists of $6000 for our online ads on discoverweyburn.com, a website consisting of anything from classifieds to updates on happenings within the community. The cost to put an ad up for a month is $500, and we want our ad to be up all year round. The cost for our radio ads are $31 per 30 seconds of airtime, we want our 30-second ad to play 312 days out of the year, or 6 days a week. Our billboard ad will be designed by Protouch signs, a reputable business who does the majority of Weyburn’s advertising needs. We thought it would be good to give people a reason to come into the store and check it out, even without spending money so over the summer we will be donating $500 in simulation rounds to various local golf tournaments, as well as events occurring in the surrounding courses around Weyburn. We will hire a website designer at the cost of $1000 to design an attractive and user-friendly website for Hole 19. Our liquor license through SLGA costs $1055, as we thought adding the option of adult beverages would enhance the social experience we are trying to offer. We want our storefront sign to be nice and visible in any conditions, so we went through Stellar Signs to order our light enhanced, 3-feet-high lettered sign depicting “Hole 19, Golf Retail and Simulation.” This brings our total marketing costs to $25,927.

Marketing Costs Year 1 Source

Online Ads 6000 DiscoverWeyburn.com

Radio Ads 9672 Golden West Radio

Billboard Ads 700 Protouch Signs

Door Prize Donations 500 Golf Courses

Website Design 1000 Stealth Interactive

Licensing 1055 SLGA

Store Sign 7000 Stellar Signs

Total 25,927

Figure 10: Marketing Costs

6.0 Financial Plan

6.1 Capital Requirements

Hole 19 requires a total investment of $1,320,000 to begin. The capital budget breakdown is $150,000 to buy the plot of land in Weyburn, SK., $1,000,000 for construction of the building and finally $170,000 for land development, furnishings,

equipment etc. To finance these costs, Hole 19 has borrowed $750,000 from Affinity Credit Union and the founders as well as their families have put up in terms of equity financing another $700,000. Total financing costs are $1,450,000 leaving us with $130,000 in case our average purchase price of $80 is too optimistic we have a slight cushion to keep us afloat.

2015

Land 150,000

Building 1,000,000

Land Development/Equipment 170,000

Total 1,320,000Figure 11: Capital Budget

Debt/Equity Ratio

2015

Bank debt 52% 750,000

Equity 700,000

Total 1,450,000Figure 12: Financing Budget

6.2 Projected Income Statement

Hole 19 consists of 3 revenue streams, including golf equipment sales, simulation sales and food and drink sales. 88% of our revenues come from golf equipment sales, 7% from golf simulators and 5% from food and drink sales. Total revenues are $1,167,14. Our cost of goods sold consists of golf equipment, food and drink. The total cost of goods sold is $639,187. Only $17,107 of that is food and drink, the other $622,080 coming from golf equipment. This leaves us with a gross profit of $527,953. Our average profit margin would then be 55%. Hole 19’s net income in the first year totals $82,272 and grows to $309,222 by year five.

For the year ended 2015 2016 2017 2018 2019

Revenues Golf Equipment Sales 1,036,800 1,328,400 1,565,852 1,685,248 1,813,748

Golf Simulators 81,463 104,374 123,031 132,412 142,509

Food and Drink 48,878 62,625 73,819 79,447 85,505

Total revenues 1,167,141 1,495,399 1,762,701 1,897,107 2,041,762

COGS

Golf Equipment 622,080 797,040 939,511 1,011,149 1,088,249 COGS Food and Drink 17,107 21,919 25,837 27,807 29,927 Total Cost of Goods Sold 639,187 818,959 965,347 1,038,955 1,118,176

Gross Profit 527,953 676,440 797,354 858,152 923,586Figure 13: Revenue Model

Net Income 82,272 148,295 229,644 268,693 309,222

Revenues 2015 2016 2017 2018 2019Number of Customers/day Equipment 36 45 52 54 57Number of Customers/day Simulators 8 10 11 12 13

Total Customers/day 44 55 63 66 70

Number of Days/year 360 360 360 360 360 Average Equipment Purchase/customer $ 80.00 $ 82.00 $ 84.05 $ 86.15 $ 88.31 Average Simulator Purchase/customer $ 28.57 $ 29.29 $ 30.02 $ 30.77 $ 31.54 Average Food and Drink Purchase/customer $ 17.14 $ 17.57 $ 18.01 $ 18.46 $ 18.92

Weighted Average Purchase $ 70.73 $ 72.49 $ 74.31 $ 76.16 $ 78.07Growth Rate Number of Customers 25% 15% 5% 5%Figure 14: Customers per Day and Average Purchase Prices

6.3 Projected Balance Sheet

For the Year: 2015 2016 2017 2018 2019

Current Assets

Cash 60,730 201,974 422,990 692,458 993,132

Inventories 213,062 272,986 321,782 346,318 372,725 Total Current Assets 273,792 474,960 744,773 1,038,777 1,365,857

Non-Current Assets

Land 150,000 150,000 150,000 150,000 150,000

Buildings 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Furniture and Fixtures 170,000 170,000 170,000 170,000 170,000 Accumulated CCA (37,000) (106,800) (168,912) (224,623) (274,972) Total Non-Current Assets 1,283,000 1,213,200 1,151,088 1,095,377 1,045,028

Total Assets 1,556,792 1,688,160 1,895,861 2,134,154 2,410,885

Liabilities Accounts Payable 54,366 69,374 81,601 87,764 94,395

Long Term Debt 720,154 688,219 654,048 617,486 578,364

Total Liabilities 774,520 757,593 735,650 705,250 672,759

Common Shares 700,000 700,000 700,000 700,000 700,000 Retained Earnings 82,272 230,567 460,211 728,904 1,038,126

Total Equity 782,272 930,567 1,160,211 1,428,904 1,738,126

Total Liab & Equity 1,556,792 1,688,160 1,895,861 2,134,154 2,410,885Figure 15: Projected Balance Sheet

6.4 Critical Variables and Sensitivity Analysis

Below is the Sensitivity Analysis for Hole 19 based on the number of customers per day and the average purchase price per customer of equipment and clothing. The factors include the average five year profit, net payback and the internal rate of return. (Keeping in mind that our Required Rate of Return is 20%)

Customers/day Average 5 year Profit Net Payback IRR

26 63,953 200,066 5.6%

31 136,835 853,173 20.2%

36 207,625 1,495,826 31.4%

41 277,841 2,135,605 40.8%

46 346,857 2,745,393 49.0%Figure16: Sensitivity Analysis Based on Customers Per Day

Avg Equipment Purchase

Price/Customer Average 5 year Profit Net Payback IRR

60 78,529 330,688 8.9%

70 144,123 918,483 21.4%

80 207,625 1,495,826 31.4%

90 270,820 2,071,627 39.9%

100 333,281 2,629,111 47.40%Figure 17: Sensitivity Analysis Based on Average Purchase Price

6.5 Break Even Analysis

The breakeven was calculated based on the number of customers paying $80 it took to make the net income equal to zero. Hole 19’s breakeven analysis can be seen in the figure below based on the amount of customers per day for the products and simulators combined. As noted, it is positive to see that we have some room to work with above the breakeven point.

Base Case Cust/day 44 55 63 66 70

Breakeven Cust/day 35 37 36 35 35

1 2 3 4 50

10

20

30

40

50

60

70

80

44

55

63 6670

35 37

36 35 35

Year

Num

ber o

f Cus

tom

ers p

er

day

Figure 18: Breakeven

6.6 Net Present Value and Internal Rate of Return

The net present value (NPV) for Hole 19 is $310,719 and the internal rate of return (IRR) is equal to 31.4%

6.8 Risk Analysis

Although the IRR and NPV do not indicate it, this venture is relatively risky because it is hard to predict the average purchase price for Hole 19 which it makes it difficult to make assumptions of the revenue projections. If indeed we have been aggressive in the average price, this venture is risky.

7.0 Summary/Feasibility Based on a Return on Investment (ROI) of 20% and an Internal Rate of Return of 31.4% we have concluded that we are a feasible venture to invest within.